Cases that exit the RTA and EL/PL protocols and then proceed on the multi-track are not subject to fixed recoverable costs, the Court of Appeal has ruled today.

In its second significant ruling on costs and the protocols in a week, the court said the uncertainty had arisen from an oversight in the drafting of part 45.29B by the Civil Procedure Rule Committee.

Qader & Ors v Esure Services Ltd & Ors[2016] EWCA Civ 1109 dealt with two conjoined appeals where road traffic claims left the protocol and assigned to the multi-track due to allegations of dishonesty. The Association of Personal Injury Lawyers and Personal Injuries Bar Association both intervened in the appeals.

Giving the unanimous ruling of the court in overturning the ruling in Qader, Lord Justice Briggs said “the claimants in each case, and their solicitors, face the unattractive prospect of pursuing their claims and resisting serious allegations of dishonesty, at trials likely to last well over one day but upon the basis of a fixed costs regime which, as will appear, was plainly designed to be suitable only for fast-track cases”.

The problem was that part 45.29 appears “unambiguously to apply the fixed costs regime to all cases which start within the relevant protocols but no longer continue under them”, the judge observed. This was exacerbated by the fact that the work on creating the regime focused on the fast-track.

Briggs LJ said: “After more hesitation than my Lords [Gross and Tomlinson LJJ], I have come to the conclusion that section III A of part 45 should be read as if the fixed costs regime which it prescribes for cases which start within the RTA protocol but then no longer continue under it is automatically disapplied in any case allocated to the multi-track, without the requirement for the claimant to have recourse to Part 45.29J, by demonstrating exceptional circumstances.”

While acknowledging that “no ordinary process of construction or interpretation of the wording of the relevant rules could lead to that result”, he said “careful analysis of the historic origins of the scheme… demonstrate that it was not in fact the intention of those legislating for this regime in 2013 that it should ever apply to a case allocated to the multi-track”.

He continued: “A conclusion that it should so apply is a result which can only have arisen from a drafting mistake, which the court has power to put right by way of interpretation even if, as here, it requires the addition of words, rather than giving the words actually used a meaning different from their natural and ordinary meaning.

“It should normally be possible to understand procedure rules just by reading them in their context, but this is a rare case where something has gone wrong, and where the court’s interpretative powers must be used, as far as possible, to bring the language into accord with what it is confident was the underlying intention.”

Briggs LJ highlighted a Ministry of Justice response to consultation in February 2013 that said: “It has always been the government’s intention that these proposals apply only to cases in the fast track and if a case falling out of the protocols is judicially determined to be suitable for multi-track, normal multi-track costs rules will apply.”

He said: “There is no evidence that the government altered its policy in relation to multi-track cases falling outside the fixed costs regime as set out [that response], nor that the rule committee consciously decided to adopt the opposite approach.”

This apparent failure met the test on whether the court has jurisdiction to put right drafting errors in statutory provisions, the judge concluded.

The best way to give effect to the intention would be to add to part 45.29B, after the reference to 45.29J, the words: “… and for so long as the claim is not allocated to the multi-track…”

Briggs LJ added: “I recognise the force of [counsel for Esure’s] submission that this process of interpretation by the addition of words risks giving rise to satellite litigation at the allocation stage by claimants seeking to disapply the fixed costs regime in relation to their claims.

“I consider that this is a risk best addressed by relying upon the good sense and vigour of case management judges in furthering the overriding objective, and in penalising those who seek to abuse the opportunity to which the allocation stage in such a claim gives rise.

“I recognise also that my proposed insertion of words to part 45.29B does nothing about the anomaly represented by the £25,000 apparent damages ceiling in part A of Table 6B. It is unnecessary in the context of these appeals to do so, both because neither of them reached settlement prior to the issuing of part 7 proceedings, and because the damages claimed are well below £25,000.

“It is a continuing anomaly which, in my view, the rule committee should be invited to consider at the earliest available opportunity. It may also be minded to devise an amendment to section IIIA of part 45 which fully reflects the concerns which underlie this judgment, not merely in relation to the RTA protocol, but to the EL/PL protocol as well.”

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